ECJ Advisor Says GSK Abused Position in Payoff

23.01.2020 -

A senior advisor to the European Court of Justice (ECJ) has accused leading British drugmaker GlaxoSmithKline of misusing its market standing by paying generic competitors  more than £50 million (€58.7 million) to delay launching alternatives to its antidepressant Seroxat after the drug’s patent expired in 1999.

In an expert opinion for the court, advocate-general Juliane Kokott suggested that pay-for-delay deals between drugmakers “may constitute a restriction of competition” and “may be an abuse of a dominant position.”  Judges should consider the long-term impact for consumers when reaching a ruling, she added.

The ECJ is due to rule later this year on the GSK case. While Kokott’s opinion is not legally binding, it is thought to carry weight and could likely influence the court ruling.

According to the newspaper Financial Times, the advocate’s opinion lends weight to an earlier penalty imposed by the UK’s Competition and Markets Authority (CMA), which concluded in 2016 that the deals struck by GSK were anti-competitive.

At that time, the drugmaker was fined £37.6 million, but GSK and the generic manufacturers challenged the decision at the UK’s Competition Appeal Tribunal, which is now seeking guidance from the ECJ as to whether an agreement to settle a drug patent dispute may constitute a restriction of competition by object or effect.

Against the backdrop of rising drug costs, the increasingly ubiquitous pay-for-delay arrangements in the drugs sector have come under increasing scrutiny. In particular, they have been criticized recently by US Democrats competing in the party’s ongoing presidential primary.

The European Commission has also criticized the practice – for several years, as the UK newspaper’s research shows – blaming it for the low levels of competition in the European pharmaceutical market and a decline in innovation.

In several cases, the Commission has taken action. French drugmaker Servier was fined €330 million and several generic drugmakers €97 million in 2014 for delaying the launch of perindopril, a generic medication to treat high blood pressure.

Where the stakes were lower, the Commission in 2013 fined Johnson & Johnson of the US and Switzerland’s Novartis together €16 million for delaying the market entry of generic painkiller fentanyl. That same year, Denmark’s Lundbeck was fined €93.8 million, and several producers of generic medicines together paid €52.2 million for delaying the market entry of generic antidepressant citalopram.

Despite the fines and the ruling in all three cases that the agreements had caused consumer harm by delaying generic entry and unduly maintaining high prices, the EU competition authority five years later reduced Servier’s fine by €102.67m after the company appealed.